Pipeline plans tied to West’s growing clout

National battle could be brewing if oilsands ownership is any indication of what is to come

Training for disaster: A Kinder-Morgan safety drill exercise prepares workers to deal with a potential spill.

OTTAWA — Canada is undergoing a seismic power shift as economic and political influence moves west, according to two recent books. And some analysts argue the muscular arms of this emerging regional force are the three proposed pipeline megaprojects that would stretch from Alberta’s vast oilsands to the Gulf of Mexico and B.C.’s coast.

Without these pipelines, Canada can’t fully tap an estimated $1.5 trillion in oilsands wealth — the equivalent of $44,000 for every Canadian, according to University of Calgary economist Robert Mansell.

He and other pipeline supporters say the numbers support the argument that these pipelines — the $6.5-billion Enbridge line from Alberta to tidewater at Kitimat, Kinder Morgan’s $5.4-billion expansion of its existing line from Alberta to the Vancouver suburb of Burnaby, and Trans-Canada’s $5.3-billion US Keystone XL line to the Gulf Coast — are in the national interest.

“Adding more pipeline capacity west, south and east is absolutely necessary to realize the West’s economic and political potential, and would pay massive dividends for the rest of the country,” according to Vancouver-born Brian Lee Crowley, head of the Macdonald-Laurier Institute think-tank in Ottawa and author of one of two recent books on the political shift of power westward.

David Emerson, a former foreign affairs and industry minister in both Conservative and Liberal governments and a one-time forest industry chief executive, doesn’t buy the argument that political power and relative economic might has so dramatically and permanently shifted westward.

But he agreed that the West is increasingly potent thanks to growing demand from booming Asian economies for commodities that Western Canada is brimming with: metals, potash, forest products and, especially, energy.

One of Emerson’s main concerns is Canada’s inability to get major infrastructure projects approved.

“We are running out the clock on Northern Gateway, and who knows whether Keystone or Kinder Morgan’s proposal will see the light of day, or a pipeline to the East Coast,” he said.

“The truth is, we tie up hundreds of millions in cash costs, billions in balance sheet capacity, and years of protracted uncertainty for projects that we seem incapable of bringing home.”

If the pipelines are indeed in the national interest, should the Harper government use its clear constitutional authority over interprovincial pipelines to prevent the B.C. government from following through on its threat to block the projects?

“On the surface, it might make sense to declare certain projects to federal undertakings in the national interest, but it is unlikely to solve much,” Emerson replied. “A provincial government committed to stop a project, or First Nations committed to stop a project, or motivated NIMBY (not in my back yard) groups can probably create enough delay and uncertainty to destroy the economics.”

Political scientist Roger Gibbins, former head of the Canada West Foundation, said he’s concerned that roadblocks to pipeline infrastructure will stall The Big Shift — the title of a new book by Darrell Bricker and John Ibbitson that explores the West’s growing political and economic might.

“I strongly believe that Asian market access is in the national interest,” Gibbins told The Sun. “However, I am deeply pessimistic about oil pipelines to the West Coast, and I’m deeply concerned about U.S. access. So, if access cannot be secured, or is secured only for B.C. LNG (liquefied natural gas) and not for oil, coal and other things, then the big shift will be cut short.”

Like Emerson, he doesn’t think the Harper government has the option of imposing pipelines on B.C. given the opposition’s intensity: “The Conservatives have got themselves in a very difficult position as they may not be able to deliver on market access.”

Gibbins said it could be a “troubling” signal of future national unity problems if a federal party with a power base in Central and Atlantic Canada campaigns in the next election against West Coast pipeline access. Both Liberal leader Justin Trudeau and the NDP’s Tom Mulcair are opposed to Northern Gateway. Trudeau is non-committal on the Kinder Morgan project; Mulcair is opposed.

“The national unity implications could be very serious, but complicated by a major schism within the West” between Alberta and the parts of B.C. less friendly to pipelines and oil and gas development, he said.

George Hoberg, a political scientist who specializes in natural resource policy at the University of B.C., doesn’t buy the “national interest” argument.

“I don’t doubt that it is in the interests of the oilsands sector (and the parts of the Canadian economy that benefit from linkages to that sector) to acquire greater access to Pacific markets through British Columbia,” he told The Sun in an email.

“It’s quite another step to say that is in the ‘national interest,’ and it certainly is not considered by most British Columbians to be in their interest.”

Part of B.C.’s resistance is based on a “cold rational calculation” that the financial benefits to B.C. don’t outweigh the environmental risks. As well, many British Columbians have not bought into the Harper government’s argument that Canada’s future depends on expanded oilsands exports, according to Hoberg.

“For most of its modern history, Canada has lacked any clear sense of national interest, but is rather an uneasy aggregation of regional interests, which at times have thrived happily together and at other times been at odds,” he wrote.

The closest comparison to today’s clash was the 1980 National Energy Program of the government of Pierre Elliott Trudeau. It was a concoction of tax changes and incentives during a time of high oil prices that many Albertans viewed as confiscatory.

“At the time, I’m sure most Canadians would have said that it was in the national interest to find ways to share the new wealth from Alberta’s oilpatch,” Hoberg said. “The core lesson from the NEP experience, endlessly preached by Alberta, was that it was wrong to impose ‘someone else’s’ national interest on a deeply opposed province. Yet that is precisely what the oilsands sector and the governments of Alberta and Canada are trying to do to B.C. with these pipelines. The pro-pipeline interests are now finding that the decentralist political culture they’ve helped create is coming back to haunt them.”

Like Gibbins, Hoberg sees a serious national unity conflict brewing.

“The pipeline conflicts open up huge wounds in the Canadian federation.”

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